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"This makes your monthly mortgage payment $1,134.49..."

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Lets run two different scenarios so you can see the differences. Let`s assume you can pay it back in 30 years or 15 years at today`s interest rates. The 30 year fixed rate mortgage in the US is running at about 4.5%. This makes your monthly mortgage payment $1,134.49. Now, the shorter duration 15 year amortization period currently has interest rates of 3.875%. At that rate your monthly payment on your mortgage would be $1,646.78. If you can afford the payments on the shorter duration you can save almost $75,000 in interest charges. Use accelerated weekly payments and save even more.

"$1,596.77 and you will pay $199,026.54 in interest over the life of the loan..."

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If the home you are buying costs $350,000 we have to make a few assumptions in order to calculate your monthly mortgage costs. Let`s assume you make a 20% down payment so you avoid paying PMI insurance on your mortgage like a smart person (also giving you a good chunk of equity out of the gate). If you want to amortize over 25 years at today`s interest rate you will be paying about a 4.8% interest rate to service the loan. 20% of 350,000 is 70,000 meaning you will need to borrow $280,000. With these assumptions in place your monthly mortgage payment would be $1,596.77 and you will pay $199,026.54 in interest over the life of the loan. As you can see the bigger the down payment the better. And these interest rates are historically low.

"States using a 30 year fixed rate mortgage with an interest rate of 4.5%..."

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We`re going to have to make a few assumptions in order to answer your mortgage question. Assuming you are buying a home in the United States using a 30 year fixed rate mortgage with an interest rate of 4.5% making a 10% down payment ofr $20,000. You will be financing 180,000 of the purchase price which, if you decide on monthly payments, works out to $907.59 a month. When considering a home purchase don`t forget you still have utilities, insurance, property taxes and maintenance to pay for on top of your mortgage. Many people who want to buy a home focus only on the mortgage payment when calculating affordability and that`s just not the complete picture.

It remains to be seen if private investors will pick up the demand. The Federal reserve has been the entire market helping to keep prices artificially inflated for these securities. Investors may demand a higher coupon rate to take on the risk when they try to sell. And does anybody believe newly packaged issue is some how better than all the garbage the Fed scooped up. I guess time will tell us the answer.

"If you can afford a shorter term mortgage it always makes sense because it..."

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That depends on a number of factors so we will have to make some assumptions. Let`s assume you take out a 30 year fixed rate mortgage which is about 4.33% right now. With these assumptions your monthly mortgage payment would be $1,235.93. You will be paying a total of $194,930.14 in interest over that time period. If you can afford a shorter term mortgage it always makes sense because it greatly reduces the interest payments charged to you which you can see can be quite substantial.

"They were also able to get a mortgage from a us bank..."

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I have friends from Canada who were able to buy a property in Arizona about 3 years ago and they were also able to get a mortgage from a US bank. I have heard since the economic meltdown it`s a lot harder to get a mortgage in the US as a foreigner so you better check into that for your particular situation. So it appears technically you can get the mortgage but in practice in this economic environment that may prove difficult.

"We are in zero interest rate policy territory..."

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We are in zero interest rate policy territory. One thing is for sure rates can only go up. Without the Fed to backstop new treasury debt issue and to prop up the MBS market one has to wonder if housing has really bottomed in the United States.

"Would pay a total of $219,626.08 in interest over the life of the loan...."

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If you borrowed 250,000 to buy your home and locked in a 30 year fixed rate mortgage at current interest rates you would have received a long term rate of about 4.8% right now. Under these loan conditions your monthly mortgage payment would be $1,304.53 and you would pay a total of $219,626.08 in interest over the life of the loan.

"There was a short spike in 10 year bond rates and if the inverse..."

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The program ended as scheduled at the end of March. There was a short spike in 10 year bond rates and if the inverse head and shoulders pattern is to be regarded then a spike up to 6% in the long term is not out of the carsds.

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